By Nerys Thomas.
Generation rent (generation of young people living in rented accommodation with little immediate chance of becoming home owners due to the high cost of property) is an ever-increasing reality within the UK. Whilst this is good news for landlords, whether they have one rental property to their name or those with large property portfolios, being a landlord can at times be compared to a costly roller coaster experience, especially when attempting to recover possession of your property.
Fundamentally, no landlord can recover possession of their property without the tenant providing vacant possession or the court ordering for the tenant to vacate. If the tenant does not leave the property following a court order being obtained, landlords must then apply for a court approved bailiff to undertake an eviction. All of which can become an expensive and time-consuming situation, where the landlord is usually already aggrieved e.g. unpaid rent.
The Ministry of Justice published statistics in November 2017 surrounding landlord possession proceedings. It is pleasing to note from this publication that the actual number of possession claims directed to court are slowly reducing, but those claims which are directed to court have seen the time frames for the matters being addressed marginally increasing. On average, the Ministry of Justice inform us that it could take 11.4 weeks from the filing of a claim at court to getting a possession order. This means that if your tenant has fallen into rent arrears and you have served the appropriate notice it will take, on average, just shy of three months from filing your claim at court to the matter being considered by a Judge. That would potentially be three further months where rent is not being paid.
It is detailed in the Ministry of Justice report that it will take on average 41.2 weeks from the date of issuing a claim at court for possession to actually recovering possession, should a tenant fail to adhere to the court order requiring that he/she vacates, and a court approved bailiff is employed to undertake an eviction. Once again, if the reason for pursuing possession is rent arrears, this time frame is likely to result in an eye-watering debt owed to the landlord.
Please note that the Ministry of Justice statistics have been collated across England and Wales, therefore the true situation in your local court may vary depending on the court’s workload. Nevertheless, the figures are a clear warning for landlords to try and protect themselves where possible.
At CJCH Solicitors, we have the experience and knowledge of providing an all-encompassing service in relation to landlord and tenant matters, whether this is to safeguard the landlord prior to entering into a rental agreement; when disputes have arisen or to recover possession and/or rent arrears through the court process. Should you wish to discuss your situation further or seek assistance with a dispute, contact Nerys Thomas at email@example.com or by telephone on 0333 231 6405.
Security of Tenure for Commercial Leases
The Landlord and Tenant Act 1954 Part II (‘the Act’) confers security of tenure on business tenants and regulates the manner in which business tenancies can be terminated.
What does this mean? Sam Pearson, our commercial law trainee explains that firstly, a business tenancy will not come to an end at the expiration of a fixed term. Secondly the tenancy cannot be terminated unless the Landlord gives sufficient notice to quit.
The statutory right of renewal can be triggered if either the Landlord gives notice of termination or the Tenant requests a new tenancy. Notices must be prepared and served in the required format and within strict time periods. There are many pitfalls with the notice, drafting and procedure and we strongly recommend seeking professional advice.
A Landlord can only oppose a business tenancy protected by the Act on certain statutory grounds:
- tenant’s failure to repair.
- persistent delay in paying rent.
- substantial breaches of other obligations.
- offering suitable alternative accommodation.
- demolition or reconstruction.
- landlord’s intention to occupy the holding.
Compensation may be payable to the Tenant if the Landlord’s application is successful. If the Landlord’s opposition to a new tenancy fails and new terms are not agreed, then an application to Court will be required. A Judge will set the terms and rent after receiving expert evidence.
On taking a new commercial lease the parties may have agreed that the tenancy will not have any statutory right of renewal. In order to do so the Landlord must serve a notice on the Tenant in the prescribed form. The Tenant must make a formal declaration confirming receipt of the notice and accepting the absence of any statutory right of renewal.
Whether you’re looking to renew a commercial lease, seeking advice on a contested lease renewal or looking to contract out of the Act our experts at CJCH Solicitors are ideally placed to provide you with the right advice to suit your business needs.
Our commercial team are available to assist at firstname.lastname@example.org, or on 0333 231 6405.
CJCH Solicitors on RENT SMART WALES – 23 November 2016
An estimated 50% of private landlords in Wales have yet to apply to Rent Smart Wales leaving them exposed to potential fines and legal action for non-compliance. If you own a property which is rented out on your behalf, or you manage your own rental property then as of this morning, 23 November 2016, the Housing (Wales) Act 2014 is already in place for you. Here’s everything you need to know:
Rent Smart Wales registration came into effect as of midnight which requires all private landlords to be registered. If you manage the property yourself, there is a further requirement for you to be licenced to do so.
The aim is to improve the standards of management in the private rental sector. Failure to comply is officially an offence and from today the enforcement powers are now active. A potential penalty of either £150 or £250 fine is applicable, with further action including being prevented from managing your properties altogether.
If you have your properties managed by an agent then you are only required to register and do not require a Licence. It is the agent’s responsibility to apply for a Licence (But you are responsible for ensuring that your chosen agent is licensed).
- Registration only:
The registration costs £33.50 if you apply for it on-line and if you want to make a paper application this route will cost £88.50.
- Registration and Licence required:
For private landlords who manage their own properties, in addition to registering there is a course which needs to be taken to enable you to obtain a licence to manage a property. Courses are offered separately and you must obtain a minimum mark of 70% to qualify. Once completed, you then apply for a Licence for which Rent Smart Wales will charge £144.00 (online) or £186.00 (paper application).
If you have not already applied for registration or a Licence you should arrange this as quickly as possible.
As a Landlord the Licence lasts for 5 years, but you have to provide accurate information about yourself and your properties and by law must keep your information up to date. This includes adding any additional properties you may acquire, or indeed sell, or any changes in your personal details.
The Licence may be granted with conditions attached and if you break the conditions or are considered no longer `fit and proper` then the Licence can be revoked which means you will no longer be able to undertake any letting or management activities.
Do not ignore your obligations to register as it may cause you problems in the future when you try to rent your properties
In addition to the penalties mentioned above, Rent Smart Wales can apply for a Rent Stopping Order or a Rent Repayment order. This would mean that if you try to rent a property without being registered or by using an unlicensed agent your tenant would not be liable for rent (would not be legally required to pay you rent) and you would not be able to serve a section 21 Notice to obtain possession of a property as an unregistered /unlicensed landlord.
It is not too late to get compliant. We can assist if you need advice or support.
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(Disclaimer: Information in this article is referenced from the Rent Smart and Welsh government Websites, with the Rent Smart Logo provided for identification)